Searching For A Good Mortgage Is Now Harder Than Ever

If you’d asked me a few months ago what the best way to get a new mortgage was, I’d have told you to find yourself an independent mortgage broker, and let them do the hard work for you.

With the credit crunch hitting the mortgage market hard, lenders had been withdrawing mortgage rates left right and center, making it more and more difficult to find the right mortgage on your own. A good independent mortgage broker should have the whole mortgage market available at their finger tips, and historically brokers have had access to deals that weren’t available on the high street.

So what’s the problem?

As mortgages were withdrawn, you’d have thought that the advice of a professional would be more important than ever. But now there is a new problem – not only have the number of mortgage deals declined, but there is now an increasing trend for lenders to offer the best deals direct to consumers – meaning it’s harder for all to compare all deals available.

A mortgage broker is unlikely to want to recommend a mortgage that their client has to take out this way, if ineed they can find them, as there would be no money in it for them – unless you were willing to pay them a fee. But if they are “whole of market”, brokers should be transparent with their clients about this, at least according to the FSA.

To make matters worse, if you decide to go direct, then you’ll be dealing with the application administration yourself – something that the broker would have looked after for you. This can potentially mean a lot of time on the phone and doing paperwork – which all adds to the cost and effort in getting your new home loan.

Why are lenders giving better deals direct?

Well, it could be to cut down on the amount of commission they have to pay out to brokers – by offering better deals direct they are probably limiting the number of applications they’ll get, and also do not have to worry about paying out commission on the mortgages that go through.

It could also be a way of developing a better relationship with the customer in order to persuade them to take out other related products, such as buildings & contents insurance or life assurance.

I’m looking for a mortgage now – what should I do?

There’s no definitive answer, but I’d suggest you speak to a couple of independent mortgage advisers and see what deals they come up with. Then, take a look at some best buy tables (but beware of low rate mortgages with high arrangement fees or unsuitable lock-in terms) and find out what deals are availableon the high street.

You’ll then have to decide which deal to go for – through the broker or direct. If you think it will be a straightforward process, then it may well pay to do it yourself, but if you’re unsure, weigh up whether the extra cost of the mortgage is worth paying for the peace of mind that you have the backup of a broker with (hopefully) plenty more experience of the mortgage market than yourself.

One thought on “Searching For A Good Mortgage Is Now Harder Than Ever

  1. Hi, I cant say I’m finding mortgages to be all that fun at the moment.
    Also, sorry to bother you again, but I was just wanting to draw your attention to this week’s blog entry. Being faced with prices continuously on the rise, in terms of both food and petrol, the amount of money saved by your average household is decreasing, whilst the amount borrowed is increasing. Food is being wasted almost as much as money is, and this is a contributing factor to our current financial climate. Our current situation should give us food for thought, and so the post can be found at – please let me know what you think!

Leave a Comment

Your email address will not be published. Required fields are marked *